The rapidly changing face of Britain was laid bare yesterday in new figures showing that one in nine people living in Britain were born abroad.

Official statistics showed the number of people born overseas who were resident in Britain increased by 290,000 last year to a record 6.5 million.

The figures included 4.1 million foreign nationals living in the country in the year to June 2008, up from 3.8 million in the previous 12 months, according to the Office for National Statistics.

A breakdown showed that Indian-born people made up the largest number of foreign-born residents last year, with 619,000 living in Britain, reflecting generations of links with the sub-continent. Polish-born residents were the second largest group, with 461,000 living in this country, following the boom in people working in Britain after the expansion of the European Union.

But there was fresh evidence that the rise in immigration from eastern Europe was coming to a close, with the numbers of people from eight former Iron Curtain countries falling by nearly half on the previous year.

Work applications from the eight EU accession countries, which include Poland, Lithuania, Hungary and the Czech Republic, fell to 29,000 in the past three months of 2008, compared to 53,000 in the same period of the previous year. Approved applications from Poland fell from 36,000 to 16,000.

In separate Department for Work and Pensions figures, there was also a significant fall in the number of National Insurance numbers allocated to foreign workers, which dropped seven per cent in the 12 months to September.

The number of short-term migrants coming to Britain for work or study was also down 13 per cent on 2006 levels, indicating how the slump in the economy is affecting the number of people travelling to Britain.

Phil Woolas, the Immigration minister, argued that the Government's new points-based immigration system would mean "that during these economic times, when people are losing jobs, people already here have the first crack of the whip at getting work".

But the Liberal Democrat Home Affairs spokesman, Chris Huhne, said: "The sharp decline in economic migrants from eastern Europe is a clear demonstration of how unappealing the recession has made the UK to foreign workers. In their desperation to look tough on immigration and court headlines, many politicians and some sections of the media forget what an outstanding contribution immigration has made to our national life. The national dish is chicken tikka masala, half of London's nurses are immigrants and both of the last two England cricket captains were born in South Africa."

Net immigration into Britain has increased sharply since the early 1990s. Overall in 1992, 13,000 more people left Britain than arrived here. However by 2007, the numbers moving to the UK outstripped those leaving by 237,000.

Tim Finch, head of migration at the Institute of Public Policy Research, said the spike in immigration that characterised the later 1990s and the last decade was likely to tail off due to the global economic crisis. He said: "The more figures we get on immigration into the UK in 2008, the clearer it becomes that migrant numbers are falling. Most striking is the 47 per cent drop in the number of eastern Europeans coming to the UK to work – if the last three months of 2008 is compared with the same period in 2007. This can be seen as a lead indicator of how migration patterns will change during a recession, because migrants from this part of Europe are mobile and can quickly respond to changing economic circumstances.

"In late 2008, the economy was slowing down and moving into recession. As expected, migration was slowing down too. In 2009, a combination of the economic slowdown and tighter controls by the Government is likely to cause immigration to fall even more."

Danny Sriskandarajah, director of the Royal Commonwealth Society, said the number of foreign-born people living in Britain compares with the estimated 5.5 million Britons who live overseas. He said immigration to Britain had to be seen in the light of hundreds of years of Britain as a hub for people on the move. "Immigration adds to the patchwork of Britain," he said. "Two generations ago the country saw Jews escaping Nazism. One generation ago there were people from the former colonies coming to Britain seeking work and study. In the past decade it has been eastern Europeans coming to work.

"Britain is such an important hub for international migration because it has such substantial links with the rest of the world, either from the legacy of colonialism or its links with Europe."

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